Understanding Aircraft Insurance Policies

Many states require that owners and/or operators of aircraft have insurance covering their aircraft and operations. At a minimum, states usually require third-party
liability coverage. This applies to injuries to third-persons that result from operation of your aircraft. Additionally, if your aircraft is pledged as collateral for
financing, the lender will require that you have hull coverage and/or replacement value insurance to insure the value of the aircraft collateral.

Obtaining the Policy

So, how do you obtain aircraft insurance? Typically, you apply for aircraft insurance through an insurance agent or broker who represents an insurance company or
companies that provide aircraft insurance policies. The insurance company then reviews the application and does any additional investigation necessary for it to
assess its risk in providing you with insurance for your public liability insurance brokers aircraft or operations. Its risk is the likelihood that it may have to pay out on a claim against your

In exchange for its acceptance of risk, the insurance company charges you a premium. The amount of that premium is a direct product of the amount of risk that the
insurance company is assuming by extending coverage to your aircraft or operation. The greater the risk, the more expensive the insurance coverage will be. In
some cases, the insurance company may not be willing to accept a particular risk for any price.

Factors that affect the underwriting decision include type of aircraft, pilot qualifications (e.g. total time, time in type, pilot certificates/ratings), nature of the operation
(e.g. pleasure, business, Part 91 or Part 135) and base of operations. General aviation policies can include non-commercial pleasure and business use under FAR
Part 91 or commercial use under FAR Part 135.

Reading the Policy

When an aviation insurance policy is issued, it represents a contract between you and your insurance company. As long as you comply with all of the terms and
requirements of the policy, your insurance company will provide you with coverage. If you fail to comply and a claim arises, you may find yourself without

Leave a Reply

Your email address will not be published. Required fields are marked *